Australian airline Rex commenced services between Sydney and Melbourne for the first time on Monday, in an attempt to challenge Qantas’ dominance over the country’s busiest route.
Despite the ongoing impact of the COVID-19 pandemic on air travel, competition between the two airlines has heated up recently as both attempted to garner control over remaining passengers.
In December last year, 183,000 passengers travelled on flights between Melbourne and Sydney, a 75.8 percent decrease compared with December 2019, according to government figures.
To help entice passengers over to its new services, Rex offered competitive prices as well as refunds if passengers’ travel was disrupted by the pandemic.
As Australia’s largest airline, Qantas dwarfs Rex in terms of services and fleet size. However, since being founded in 2002, the smaller airline has managed to survive by offering flights to more remote regions of Australia.
Last week Rex publicly accused Qantas of “aggressive predatory moves” for offering new services on regional routes already operated by Rex, which it says even before the pandemic were unable to sustain two airlines.
“All of these routes have only supported one regional carrier in the past and the current monthly passenger numbers are laughable,” the company said in a statement.
“Even when passenger numbers return to pre-COVID levels, these routes would still be unable to viably support two carriers.”
Rex’s Deputy Chairman John Sharp said that the airline would “stand its ground” and continue to operate the routes even if it meant both airlines operating at a loss.
The airline also introduced new services for two other routes where Qantas was the sole or dominant operator, between Sydney and the coastal cities of Coffs Harbour and Port Macquarie, which before COVID-19 together catered to over half a million passengers annually.
He added that due to the additional financial pressure, five more marginal routes that the airline was previously subsidizing would need to be discontinued, primarily between Sydney and regional centers which each comprised between 6,000 to 20,000 passengers annually before COVID-19.
Rex called on the government regulator, the ACCC (Australian Competition and Consumer Commission), to step in and put a stop to the introduction of competing services on regional routes while the pandemic continues to significantly impact both airlines.
“All carriers are facing existential challenges and the ACCC must do its part to ensure that the dominant carrier does not take advantage of the current situation to deliver pre-emptive strikes against its much smaller competitors,” the company said.